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HoSE Conducts Testing of New KRX Technology System

The Ho Chi Minh Stock Exchange (HoSE) will conduct testing of the new Korea Exchange (KRX) technology system from March 4th after previously delaying the official launch that was originally planned for late last year.

In a recent document sent to securities companies, HoSE announced that it will carry out the conversion to the new KRX technology system from March 4th to March 8th. The exchange has requested that securities firms prepare their systems for conversion according to the scheduled timeline and conduct system testing and a cutover test on March 7th. 

From March 11th to 15th, securities companies will test placing test trading orders and ensure operations run as a normal trading day. HoSE noted that the first day on the new system will be March 4th, and data for the first trading day will be the data from the end of March 1st.

KRX is a technology system designed by the Korea Exchange to provide many new utilities, most notably supporting retail investors to trade in lots on a separate board and carry out buy-sell transactions within the day (T+0). The contract to design, supply, install and transfer the technology system was signed between HoSE and KRX in 2012, worth 600 billion dong.

Initially, HoSE planned to complete the migration by 2021 but subsequently faced repeated delays. Most recently, the new technology system was scheduled for official launch by the end of 2023, however the timeline had to be pushed back again.

The KRX system has been highly regarded by many investors, securities firms and analysts, with expectations that it will become a new "tailwind" for the market in the long run. In the meantime, information about testing and promises of launch have become a major driving force pushing stock prices higher, especially for stocks in the securities sector and the overall market index.

In its research report issued earlier this year, KB Securities Vietnam (KBSV) estimated that the new system could help increase the average daily trading value of the VN-Index by 30-70% compared to the average liquidity over the past 5 years. The firm noted that the operational launch of KRX will meet remaining conditions for FTSE Russell to upgrade Vietnam's market classification.

At HoSE's new year bell ceremony, Ms. Nguyen Thi Chau Phuong - Chairwoman of the State Securities Commission of Vietnam, said that the official launch time of the KRX system does not only depend on the management agency or HoSE as the project owner, but also requires participation from market members, especially securities firms.

"With the direction of the Ministry of Finance and coordination of the State Securities Commission, the new technology system will soon be put into operation," Ms. Phuong said.

Ms. Nguyen Thi Viet Ha - Acting Chairwoman of HoSE said the exchange has completed the final end-user testing stage with KRX. The exchange will try its best to deploy the system this year.

HoSE is hoping that successful testing of the new KRX system from March 4th to 15th will allow it to finally launch the new technology platform, which has faced numerous delays but is seen as crucial to modernizing Vietnam's stock market and improving liquidity and accessibility for both local and international investors. Securities firms and traders will closely monitor how the testing period goes as a indicator of whether the long-awaited system will see official launch in the coming months.

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